Blog with MAE Capital

Have you been trying to enter the Real Estate market but just cannot save the money required for a down payment and closing costs?  Then you have come to the right place.  We have a new program that will give first-time buyers or homebuyers in general up to 5% of the purchase price for a down payment and closing costs.  This program is great as you are not required to be a first-time homebuyer to qualify for this.  We have partnered with a company that has a program called Chenoa.  This is a pool of funds that are designated to assist home buyers with the costs of getting a home.

The Chenoa program is paired with an FHA Loan and this works great as FHA only requires a 3.5% Down payment and that would leave you with 2% left for closing costs.  It is conceivable for a home buyer to get into a home with no money out of pocket.  In this crazy Real Estate Market, I would advise my clients to have at least 1% of the sales price as a minimum.  This would be for additional items such as inspections to make sure the house you are buying is in good condition.  Although the market is crazy, and sellers are calling the shots you still have the ability to negotiate work to be done on a house prior to closing.  

Since the Real Estate market is so competitive this program will allow for a buyer to still be “in the game” as a buyer you will not need to ask the seller for any concessions towards the purchase because you as a home buyer do not have enough money.   In a regular Real Estate market, sellers will generally help pay closing costs if the price of the home can absorb those fees.   In this market asking the seller to pay for anything is tough as there will be a line of people trying to buy the same house with more money down or no concessions from the seller.  This is where this program makes good sense for a buyer as they will not have to ask the seller for any money towards closing costs.  

The documentation for this program is the same as a regular FHA loan.  You will need to provide 30 days of pay stubs, 2 months of bank statements, W2s for the last 2 years, and a 620 Credit score.  There are income limitations that are you cannot make more than 130% of the median household income for your area in Califonia.  It can also go fast as there is no more additional underwriting that some other Down Payment Assistance programs require such as CalhFA.   This will also help to get your offer accepted as you can close this in 30 days or less.  At MAE Capital Mortgage we are here to walk you through this loan and all the loans in our arsenal.  It doesn’t cost anything to see if you qualify for this we are just a phone call or a click away.  We look forward to assisting you with this product in California.  Call us at 916-672-6130 to talk with a licensed Loan Officer or Click Here to provide your information confidentially.  



Posted by Gregg Mower on April 23rd, 2021 10:11 AM

Ok we are a little over 2 months now since California shut down (March 16) so what is going on with interest rates?  Interest rates are great let’s just start there.  Interest rates are in the low 3’s and high 2’s currently.  So what is driving interest rates, you would think the answer would be easy, however it is far from easy.  There are many different factors that will determine what your interest rate will be and it will vary from person to person based on there credit scores, down payment or equity, cash back verse no cash back, loan size, loan program, fees waivers, and list goes on.  If you hear an advertised interest rate that is really low it probably does not pertain to you or what you would want from your home loan. Interest Rates are also geographical meaning that depending where you live in the United States will determine your base interest rate. So how are rates calculated and how do they vary from lender to lender.

First lenders across the nation give California a little higher interest rate than the rest of the nation to begin with.  This is due to the fact that California home loans tend to pay off faster than other parts of the nation.  This affects interest rates in that the longer a borrower will hold on to their current mortgage the more interest a lender can accumulate over time.  In California people tend to move more often that other parts of the country making the amount a lender can make on interest over time less so in order to compensate they raise the initial interest rate a bit.  So if you are hearing, on the news, that interest rates across the nation have come down and they give you an average rate you can rest assured that California will be on the high side of the curve. 

The next determining factor or factors that determine the interest rate you will get is your credit score(s).  When a lender is pricing your loan, they have to use the low mid-score of a married couple and the mid credit score if you are single.  When your Loan Officer (MAE Capital Mortgage)  prices your loan with lenders across the country we will have to have your credit score and the amount you are putting down and other factors in order to get the rate that fits you specifically then we will shop for the best loan scenario.  It also makes a difference if you are choosing a mortgage that will pay off bills in other words if you take cash out of the equity of your home on a refinance it will also increase the interest rate a bit.  When you hear a lender advertising that they will pay off all your bills with a refinance know that is costing you a little bit more to do that.  I would not discourage this just be aware of the increased costs even if you have 800+ credit scores the interest rate will be a bit higher.

If you are one of those who love to shop around to find the best interest rate you had better be prepared to give your exact credit score, down payment or equity position that is accurate as a bare minimum.  Here at MAE Capital that is exactly what we do on every one of our loans as we are Mortgage Brokers that hold both a California Department of Real Estate License as well as the National Mortgage Licensing System (NMLS) license in order to be able to offer rates from lenders across the nation.  Not all lenders are created equal so be aware that rates will vary from mortgage company to mortgage company and that has to do with their overhead requirements.  The more people a lender has to employ the higher the cost for that lender to originate a home loan.  A Mortgage Broker will have less overhead, in most cases, than a Mortgage Banker or a Bank who will underwrite and fund their own originated loans.  The reason why a Mortgage Broker will have lower rates is the fact that they can shop the entire nation for lenders with the best rates and programs where Banks and Mortgage Bankers will only have their own set programs offered by there company.  Mortgage Brokers also get what is called a wholesale rate verses a retail rate and that low rate is pushed to their/our customers. 

The type of loan you choose will have a different rate than other loan types.  A loan type is a FHA Loan, Conventional Loan, VA Loan, Jumbo Loan, Non-traditional loan, Private Money Loan, USDA Loan, CALHFA Loan, and more.  All of these loans will have different rates associated with the risk they carry the higher risk loans, such as Private Money or Hard Money Loans carry the highest rates.  Again, if you hear an advertisement for an interest rate or program know that what you hear is not what you will actually get, in most cases.  For example; we have a lender that we sell loans to that has a program out now that has interest rates in the 2’s, but you have to have the perfect scenario in order to qualify for that program such as 750 mid credit score down payment or equity greater than 20% of the value or purchase price of that home, if you fit the parameters you win and get the rate.  But if you are trying to take cash out of your home to pay bills off then suddenly you don’t and most people only hear what they want to and when they hear rates are in the 2’s they tend to pick up the phone and call around.  Another factor that is currently changing the interest rates is the fact that many people have listened to the media and have stopped making their mortgage payment during the pandemic this not only hurts them but it hurts those with good credit and never being late on a mortgage.  With people not making their payments during this pandemic it is hurting those that are, and are making higher interest rates.  You see lenders have priced in the profit from collecting mortgage payments for the origination of a new loan before the pandemic and now they simply are not so we are experiencing higher rates because of this.  One phone call to MAE Capital Mortgage Inc. and we will be able to run your credit while we have you on the phone and will be able to give you an accurate interest rate.  I hope this blog helps people to navigate through all this and we are here to help.  Give u a call to get your pricing today at 916-672-6130. 

Posted by Gregg Mower on May 27th, 2020 10:50 AM

FHA Loans were born from the great depression in 1933 when the Federal Housing Administration was established.  The idea of the Government insuring a Real Estate loan, at the time, was groundbreaking.  In today’s world we expect the Government to step in and try to fix things when the economy is sluggish or depressed.  Back then our government was far less apart of the ordinary citizen’s life.  So when the private sector was approached by the Government to insure mortgages that were traditionally insured privately by large down payments was a ground breaking concept.  At the time Banks and Brokers were the only way to get a home loan and they required that a potential home buyer put 25-50% or more down to buy a home.  So when the Government said they would insure mortgages up to 95% of the value of the home, you can imagine how this changed the way Real Estate Loans were originated.  It was designed to stimulate housing growth to get the country out of the grips of the Great Depression.  It worked, along with a whole new age of people relying on the government to help them when things were tough.  Out of the Great Depression we also got a welfare system, unemployment insurance that the government collected from employers to help with displaced workers, and a whole litany of other programs that expanded the scope of the Government.  The Federal Housing Administration (FHA) was designed to be a short-term way to get the housing markets stimulated to get out America out of the depression.  As with most Government Agencies the program still exists today, and you can take full advantage of it. 

Today FHA loans are alive and well and are used still today to get people into homes with a small down payment.  FHA loans are still a viable loan for those that have a small amount of money to purchase a home.  The way an FHA loan works is very similar to Conventional Loans in that a potential borrower must qualify for the loan with their income and current credit.  When we say "qualify" there are several factors that a lender must review in order for a client to “qualify” for any loan.  These factors are but not limited to having shown the ability to handle credit or in today’s word have a credit score that meets the criteria of an FHA loan (550 or better).  Generally speaking FHA loans are more accepting of psat credit issues than that of it’s Conventional counterpart.  If a borrower has a low credit score due to circumstances out his or her control and has shown that they are trying to take care of it and that is the only factor with regards to their financial situation they generally can get approved for a FHA Loan.   In order to qualify for an FHA loan a potential borrower must have a two year history of working that could be multiple jobs or a combination of school and a job and must be able to show that their income will be stable enough to maintain the mortgage payment. Next, a borrower has to be able to prove they have enough money for the 3.5% down payment.  This money can come from savings or can be a gift from a relative or a close family friend, or an approved Down Payment Assistance Program. At MAE Capital Mortgage we can do this for you over the phone.

FHA loans are a federally insured loan, but what exactly does that mean? Simply put there are two payments to the insurance fund a borrower will have to make; One the upfront insurance is 1.75% of the loan amount (Sales Price minus the 3.5% down payment requirement) this is actually added to the loan so you don’t have to come out of pocket for this; Two the monthly payment of the mortgage insurance is a small percentage of the Loan amount every month .(5%).  This insurance makes FHA loans more appealing to lenders and thus lenders have more flexible underwriting guidelines and can get more people into homes utilizing the FHA Loan. 

When talking about flexible Underwriting guidelines your eyes probably just rolled to the back of your head.  Not to worry I am here to help break it down to simple bullet points that you may not have heard of before.  Being evaluated for loan approval seems daunting but that is why we have a team of folks to walk you through the whole process.  Our highly qualified loan originators will walk you through the process.  The Loan Officer will gather your pay-stubs, tax returns, bank statements and W2’s and they will do the analysis for you.  Your Loan Officer will check your credit, check your debt-to-income ratio, and make sure you have enough money verified to close the transaction.  The Loan Officer’s job is to paint your financial picture with your financial information and present it to the underwriter, who will approve your loan.  Our Loan Officers do this every day, multiple times, so they are experts at what it takes to get an FHA loan approved, so when you are looking for expert advice and guidance please let us at MAE Capital Mortgage walk you through this process. 

The benefits of using an FHA Loan are:

  1. You Only need 3.5% for a down payment and that can come from your savings, a gift from a family member or an employer, or a government institution, or an approved down payment assistance program.
  2. Your Credit Score can be as low as 550.
  3. Your Debt-to-Income Ratio can be as high a 50%
  4. Interest Rates are Lower
  5. You can take cash out of your home up to 85% of the value of the house.
  6. You can finance 1-4 units utilizing FHA.
  7. You can buy a house 2 years out of bankruptcy.
  8. There are a few more technical advantages that are there but are a bit too confusing so know that FHA loans give you an advantage if you are not an A-1 borrower and still get great rates.

Now that we have explored the history and the benefits of using an FHA loan you may ask:  “How do I apply for an FHA Loan?”  At MAE Capital Real Estate and Loan, we have over 35 years’ experience working FHA loans, so we should be your logical choice, not to mention our interest rates are better than the rest.  Simply click on this link and you can start the process or call us at 916-672-6130 and we can do it for your over the phone.     

Posted by Gregg Mower on October 22nd, 2019 12:06 PM

Welcome to 2018.  I think it is a good time to review all the available loan types in today’s lending world and what they are uses for.   Although there has been changes in the industry There are still options for people to get financing for both their primary homes and their investment property.  There are creative options for those that are self-employed that don’t show all their income on their tax returns.  Of course, we have the basic home loans like FHA, VA and Conventional loans that are still priced really good for an economy that is starting to build steam.  On the end of the spectrum we have Hard MoneyLoans available for those investment properties that banks may have said no to for one reason or another.  All these loans have their purpose in today Real Estate Markets.

Let’s start a look at the most basic of loans that are used for purchasing and refinancing primary residences.  These loans are, what we in the industry call, “A” paper loans.  These loans also fall under, what the government calls, Qualified Mortgages or QM loans.  These loans are full of regulations designed to protect the consumer from lenders that may not have their best interest in mind.  One of these loan types is the Convectional loan and is the most widely used type of mortgage.  The Conventional Home loan will allow buyers to purchase home and put as little a 5% down.  A Conventional home loan is privately insured which means if you put less than 20% down you will be required to purchase mortgage insurance from a private institution.   The same would hold true for a refinance, you would need greater that a 20% equity position in order to refinance a Conventional loan without Private Mortgage Insurance (PMI).   Because the insurance is private the underwriting guidelines are a little tighter than that of the Government insured loans like FHA.   Traditionally FHA insured loans have had the full faith of the Federal Government backing these loans making them more desirable for banks to sell the loans to each other.  Thus, interest rates on these loans are little lower than their Conventional counterparts and the underwriting criteria for FHA loans are little easier as well.  So, if you have a lower FICO score (550-660) FHA will probably be your best bet as there are not additions to the interest rate with lower credit scores with the FHA loans.  FHA does come with mortgage insurance, however, with the higher Loans to Value loans it still is a lower payment than a conventional loan.   Both FHA and Conventional loans now do not require a termite report and clearance unless it is asked for in the Real Estate Contract making both loans flexible for home buyers in a tight Real estate market or if buyers are willing to buy light fixers.  The Veterans Administration loans or VA loans are only for those that have served in the military and have the eligibility required (usually 4 years in) to qualify.  The benefits of being able to use a VA loan are great, besides the fact that the Veteran does not have to put any money down at all it is fairly easy to qualify for the payment as interest rates are low for these loans, as well.  VA loans will take Veterans with credit scores as low a 550 with no money down and no mortgage insurance.  These are all considered Qualified Mortgages in the Government’s eyes and will require certain waiting periods to ensure borrowers have the ability to shop and compare and make sure the loan being offered them is good for their situation. 

Another option for home buyers under the Primary Residence type of loan is the Bank Statement qualifying loan.  These types of loans are still considered Conventional loans as they are privately underwritten.  They are specifically designed to provide an alternative way of qualifying as opposed to the traditional way of having to provide Federal Tax Returns.  These loans will require a borrower to provide 12-24 months of bank statements from their personal or business accounts or both.  They will be qualified by averaging their deposits and taking out a certain expense number and that will be the income that will be used to qualify them.  As it still falls under QM loans these loans are required to make sure the borrower has the means to make their mortgage payment that they are applying for.  Due to the fact that Private Mortgage insurance companies will only underwrite under traditional income qualifying guidelines these loans will require a 20% or more down payment.  As they are considered “higher risk” loans and interest rates are bit higher than Traditional Conventional loans and FHA loans. 

Lastly, we need to cover a sector of the market that is almost considered “Underground Funding” and that is Private Money Loans or Hard Money loans as they have been called traditionally. Private Money loans are for those investors that don’t qualify for financing under traditional bank guidelines.  Hard Money loans are used primarily on investment property both Residential and Commercial properties.  These loans are arranged by mortgage brokers with private funds from private investors (individuals) and hedge funds.  The borrower is not scrutinized as much as the property is under this type of funding and the bigger the equity position is the better chances are that an investor will fund the project.  The minimal investment required to get a Private Money Loan or Hard Money loan is 30% of the project’s value or purchase price. whichever is less.  These loans can be used to purchase Residential, Commercial, Industrial, Mixed-Use, Land, Construction projects, Churches and those properties that Banks tend to shy away from.  Hard Money loans can be used to refinance an existing project, or provide funds for construction.  

There are many different types of loans available today and can be used for many purposes.  Here at MAE Capital Mortgage we have all these loans available.  Not only do we have these loans available we have experts in guiding you to the right loan product.  As we are a Mortgage Broker we are also limited by the government on the amount we can charge for certain products thus making our loan interest rates and fees the best in the market.  We work with direct lenders and get what is called a wholesale interest rate which is lower than a retail interest rate you would get from a Banker or direct lender and we pass those saving on to you.  We know you have options out there and I would advise that you work with a team like MAE Capital Mortgage that has decades of experience that will be passed on to you in the form of knowledge and  reduced costs and fees.  Please call our offices is you have any questions regarding these loans or Real Estate we welcome the opportunity to help you with this process.    MAE Capital Mortgage 916-672-6130 or www.maecapital.com. 

Posted by Gregg Mower on January 8th, 2018 12:55 PM

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MAE Capital Real Estate and Loan

CA DRE #01913783|NMLS #806170

4940 Pacific Street Suite A
Rocklin, CA 95677